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UK base rate to rise “pretty soon”


UK interest rates will “rise pretty soon” according to Bank of England (BoE) policy maker David Miles.

Miles told BBC Newsnight that the BoE will raise the base rate from its current record low of 0.5% in the near future, and that he is now more optimistic about the UK economy than at any time since he joined the BoE.

Miles has been on the Monetary Policy Committee (MPC) since June 2009, and this month voted to keep the base rate at it’s record low. This months vote was his last, and he is now preparing to leave the MPC.

Augusts vote saw the members of the MPC vote 8-1 to keep rates on hold, which is the first time for months that the decision was not unanimous. This, along with comments from Miles and MPC member Kristin Forbes, who has warned that waiting too long to raise interest rates risked undermining the UK's recovery, are signs that a rate rise is imminent.

Mr Miles said:
"I don't think it's anything to worry about, it's a sign of health.

"Within the UK economy consumer confidence is strong, corporate confidence is pretty strong and the financial system is operating near normal now."

Mark Carney, governor of the Bank of England, has said then when interest rates begin to rise, they will do so gradually. Many economists believe the rate rise will happen in early 2016.

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